chapter 6
Chapter Objectives 1
Chapter Objectives 2
Trade
Figure 6.1 Growth of World Merchandise Exports
Figure 6.2 Sources of World’s Merchandise Exports, 2004
Trade Theories
Classical Country-Based Trade Theories
Mercantilism
Disadvantages of Mercantilism
Protectionism
Absolute Advantage
Comparative Advantage
Differences between Comparative and Absolute Advantage
Comparative Advantage with Money
Relative Factor Endowments
Figure 6.3 U.S. Imports and Exports, 1947: The Leontief Paradox
Development of Firm-Based Theories
Firm-Based Trade Theories
Country Similarity Theory
Product Life Cycle Theory
Stages in the Product Life Cycle
Figure 6.4a The International Product Life Cycle: Innovating Firm’s Country
Figure 6.4b The International Product Life Cycle: Other Industrialized Countries
Figure 6.4c The International Product Life Cycle: Less Developed Countries
Global Strategic Rivalry Theory
Sustaining Competitive Advantage
Porter’s Diamond of National Competitive Advantage
National Competitive Advantage
Figure 6.6 Summary of International Trade
Types of International Investments
Figure 6.7 Stock of Foreign Direct Investment, by Recipient
Table 6.4a Sources of FDI in the U.S.
Table 6.4b Destinations of FDI for the U.S.
International Investment Theories
Ownership Advantages
Internalization Theory
Dunning’s Eclectic Theory
Table 6.5 Factors Affecting the FDI Decision
Map 6.1 Availability of Natural Resources: The Tuna Industry in Indonesia